The Dow industrials and S&P 500 fell on Wednesday on renewed worries over Greece's financing woes and ahead of an auction of Treasury notes that could further drive up yields and hurt a fragile housing recovery.

The Treasury will sell the 10-year notes as the prospects for a stronger economy have propelled the yield on the note, a benchmark for mortgage rates, toward 4 percent. Investors worry that if rates go too high, the housing revival could stall.

European stocks <.FTEU3> fell slightly as investors questioned the credibility of Greece's aid package as the Greek finance minister said local banks, hit by a series of credit rating downgrades, asked for more financial support.

One of the key dynamics is a renewal of a tired and familiar ... (negative) story out of Greece, with the equity market there down almost 3 percent on the day, and bond yields really blowing out pretty dramatically, said Craig Peckham, equity trading strategist at Jefferies & Co in New York.

The Dow Jones industrial average <.DJI> dropped 30.68 points, or 0.28 percent, to 10,939.31. The Standard & Poor's 500 Index <.SPX> fell 2.70 points, or 0.23 percent, to 1,186.74. The Nasdaq Composite Index <.IXIC> added 2.79 points, or 0.1 percent, to 2,439.60.

U.S. equities have feasted on five weeks of gains, pushing major indexes to highs not seen in a year and a half. The Dow could pierce the psychologically important 11,000 level.

Shares in Family Dollar Stores Inc rose 4.6 percent to $39.52 after the discount retailer reported higher-than-expected quarterly profit on a boost from longer store hours and sales of private label items, and forecast earnings above estimates.

Monsanto Co rose 0.6 percent to $69.93 after the agricultural seed company reported profit below expectations, but analysts said they were surprised results weren't worse.

Helping the banking sector, Goldman Sachs raised its view on a host of regional banks, including KeyCorp which was upgraded to buy from neutral. The company's shares rose 3.7 percent to $8.78.

The Nasdaq was helped by strength in ICAP technology stocks

such as Apple Inc , up 0.5 percent to $240.86, and Cisco Systems Inc , up 1 percent to $26.48.

Federal Reserve Chairman Ben Bernanke is due to speak on Economic Challenges: Past, Present and Future at a Dallas luncheon later Wednesday, and investors will scour his comments for clues about the Fed's thinking on interest rates and the economy, given recent better-than-expected economic data.

(Reporting by Edward Krudy; editing by Jeffrey Benkoe)